My Top 5 Personal Finance Blunders

by Ron Haynes

NOTE: This post was graciously included in the 3rd Anniversary of the Carnival of Personal Finance #157 as an EDITOR’S CHOICE at Consumerism Commentary. Many thanks to Flexo for hosting. Be sure and subscribe to Consumerism Commentary via RSS or email.

I’ve written some posts in the past few months about 7 bad decisions I made that cost me over $1,000 and on the 12 things I learned by 42 that I wish I’d known at 22. I’ve exposed my worst decision ever as well as many things I didn’t learn in college.

I decided to examine what were the underlying causes of my top 5 personal finance blunders and I came up with these:

I misused credit cards

I got my first credit card when I was 18. I didn’t know anything about credit and no one had ever explained how it worked. I got a store credit card and dutifully paid it off the next month. Later, I used it to buy Christmas presents and went overboard with it. I couldn’t pay it all off at once, so I made payments. It became a downward spiral as I would finally pay off the card and then charge it right back up.

I wasn’t able to conceive of something as complicated as credit card arbitrage. I was simply using credit to get the “things” I wanted without having to pay for them, or even be able to pay for them.

Later, I found myself tens of thousands of dollars in debt, consumer debt…and with virtually nothing to show for it. THAT’S the biggest blunder you can make with credit cards.

I failed to start early

There’s always time, that was my motto. I never thought I would be playing catch up. I was going to be a rich multi-millionaire before I was 30!

The fact is, it’s never too late to start saving money, but it’s also NEVER too early! My problem was that it was so difficult. The reason it was so difficult was because I had failed to learn to discipline myself to do it anyway.

I depended on borrowed money

I depended on borrowed money to finance my education. I depended on borrowed money to buy a home. I depended on money to finance my vehicles. I depended on borrowed money (via credit cards) to buy almost everything I wanted or needed. Borrowed money must be paid back and it wasn’t long before my entire paycheck became just one big debt payment.

When everything you make has to be used to make debt payments, you cannot build wealth. It just ain’t gonna happen.

I chased hot investments

I fell into the tech bubble in 1999 and my timing couldn’t have been worse. Just as the market peaked, I began investing in a technology fund. After about 6 months of dollar cost averaging into a sinking ship, my losses were horrible. I bailed out in 2000 and avoided investing in anything for quite some time.

When I did get back into the market, I chased returns from mutual funds, stocks that were rising, and finally settled on some diversified index funds. I still have a little money that I play with, but most of my portfolio is in safe places rather than the latest and greatest thing.

I lived paycheck to paycheck and spending every last dime I made

I’ve already mentioned some aspects of this, but when you spend every last dime you make on eating out, payments, gifts, dumb mistakes, junk food, clothes, and stuff that won’t matter in 5 days, you cannot, you WILL NOT get ahead.

Living paycheck to paycheck isn’t fun. It isn’t satisfying. It isn’t enjoyable. It isn’t how I thought I would live my life when I was growing up.

What to do

It’s never too late to change. No matter what you’ve done, no matter where you are financially, no matter how much debt you’re in, no matter what, make the decision to do whatever it takes to change your current course.

Ignite the fire inside of yourself and make the decision to change where you’re headed. You can do it. I know. I did.

[tags]credit, debt, finance, paycheck[/tags]

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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Jeff@My Super-Charged Life

I’ve made all the same mistakes! It is refreshing to know that I’m not the only one. This article reminded me of a great Chinese Proverb that I heard recently. It goes like this:

“The best time to plant a tree was 20 years ago. The second best time is now.”

I agree that it is never too late to start doing the right thing.



That’s a great proverb. I’ll have to remember that one!
When I was thinking about going back to school, I told someone that “it would take me two years to get finished.” His reply was, “so what are you going to be doing anyway?”

Get started NOW!

Frugal Dad

We both wrote reflective posts today, and like you, I’ve made many of these same mistakes (in fact, I think my list is just about the same as yours). I made matters worse in the late 90′s by dabbling in margin trading – so not only did I lose my shirt, and I lost shirts I didn’t even own! Dumb, dumb, dumb. Some days I wish I had a time machine so I could go back and smack some sense into my twenty-something, know-it-all self!

@Jeff: Great quote on the Chinese proverb! Very “on point” with Ron’s post, and many of my own reflections on things I would have done differently. It is a great reminder that no matter how much time we’ve lost, there is no time like the present to get going!


#Frugal Dad→

I just hope, more than anything, that this online “journal” will serve my children well and teach them something.

Mrs. Micah

Mighty Bargain Hunter wrote about this too…we have to start where we are. Even if we screwed up in the past, it may be too late to do things perfectly but it’s not too late to start.


#Mrs. Micah→

Thanks Mrs M!
That was a nice little encouraging tidbit! We all need those every now and then… :)

otherdeb (Deb Wunder)

Hi Ron!

Thanks for this great article. I took it as the stepping off point for doing a list of my top five financial blunders in my own blog, The Dangling Conversation. It really made me think!

My Dollar Plan

Ron, I think that writing down the things you made mistakes on will almost guarantee you won’t do them in the future. Congrats for taking a step in the right direction!


Unfortunately, my latest financial blunder was this past year. I guess it wasn’t a financial blunder per say, but it was certainly a big problem due to my lack of planning. We ended up owing over $3000 in taxes this year. My wife was a contracter for part of the year and we did not adequately plan for the tax consequences. On the positive side of things, I now tend to look for possible tax implications on all of our financial transcactions.

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